Amazon posts strong Q4, full year results
Amazon reported that net sales increased 9% to $149.2 billion in the fourth quarter, compared with $137.4 billion in the fourth quarter of 2021. Excluding the $5 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased by 12% compared with the fourth quarter of 2021.
Amazon’s North American segment sales increased 13% year-over-year to $93.4 billion or increased 14% excluding changes in foreign exchange rates.
The company's international segment sales decreased 8% year-over-year to $34.5 billion or increased 5% excluding changes in foreign exchange rates. AWS segment sales increased 20% year-over-year to $21.4 billion.
Amazon's operating income decreased to $2.7 billion in the fourth quarter, compared with $3.5 billion in the same period in 2021. Fourth quarter 2022 operating income includes approximately $2.7 billion of charges for changes in estimates related to self-insurance liabilities, impairments of property and equipment and operating leases and estimated severance costs. These charges primarily impacted the North American segment, the company said.
Amazon's North America segment operating loss was $.2 billion, compared with an operating loss of $.2 billion in the same quarter in 2021. The international segment operating loss was $2.2 billion, compared with an operating loss of $1.6 billion in the prior year period.
AWS segment operating income was $5.2 billion, compared with an operating income of $5.3 billion in the prior year period. Net income decreased to $.3 billion in the fourth quarter, or 3 cents per diluted share, compared with $14.3 billion, or $1.39 per diluted share, in the fourth quarter 2021.
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In reporting its full-year 2022 results, Amazon said its net sales increased 9% to $514 billion in 2022, compared with $469.8 billion in 2021. Excluding the $15.5 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased by 13% compared with 2021. North America segment sales increased 13% year-over-year to $315.9 billion. International segment sales decreased 8% year-over-year to $118.0 billion or increased 4% excluding changes in foreign exchange rates.
AWS segment sales increased 29% year-over-year to $80.1 billion. Operating income decreased to $12.2 billion in 2022, compared with $24.9 billion in 2021. North American segment operating loss was $2.8 billion, compared with an operating income of $7.3 billion in 2021. International segment operating loss was $7.7 billion, compared with an operating loss of $0.9 billion in 2021.
AWS segment operating income was $22.8 billion, compared with an operating income of $18.5 billion in 2021. Net loss was $2.7 billion in 2022, or 27 cents per diluted share, compared with net income of $33.4 billion, or $3.24 per diluted share, in 2021.
In 2022, net loss includes a pre-tax valuation loss of $12.7 billion included in non-operating income (expense) from the common stock investment in Rivian Automotive, compared to a pre-tax valuation gain of $11.8 billion from the investment in 2021. Operating cash flow increased by 1% to $46.8 billion for the trailing 12 months, compared with $46.3 billion for the trailing 12 months ended Dec. 31, 2021. Free cash flow decreased to an outflow of $11.6 billion for the trailing 12 months, compared with an outflow of $9.1 billion for the trailing 12 months that ended Dec. 31, 2021.
“Our relentless focus on providing the broadest selection, exceptional value and fast delivery drove customer demand in our stores business during the fourth quarter that exceeded our expectations—and we’re appreciative of all our customers who turned to Amazon this past holiday season,” said Andy Jassy, Amazon CEO.
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Jassy continued, “We’re also encouraged by the continued progress we’re making in reducing our cost to serve in the operations part of our stores business. In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon. The vast majority of total market segment share in both global retail and IT still reside in physical stores and on-premises datacenters; and as this equation steadily flips, we believe our leading customer experiences in these areas along with the results of our continued hard work and invention to improve every day, will lead to significant growth in the coming years. When you also factor in our investments and innovation in several other broad customer experiences (e.g. streaming entertainment, customer-first healthcare, broadband satellite connectivity for more communities globally), there’s additional reason to feel optimistic about what the future holds.”
Among the highlights the company cited was the launch of Amazon Clinic, a message-based virtual health service that "delivers convenient, personalized, affordable care for more than 20 common conditions."
Amazon Clinic lets customers choose from a network of leading telehealth providers based on their preferences. Amazon also recently launched RxPass, a new Prime membership benefit from Amazon Pharmacy that offers access to unlimited eligible prescription medications for only $5 per month including free shipping, the company noted.
In reporting guidance for the first quarter of 2023, Amazon said that net sales are expected to be between $121 billion and $126 billion or to grow between 4% and 8% compared with the first quarter of 2022. This guidance anticipates an unfavorable impact of approximately 210 basis points from foreign exchange rates.
Operating income is expected to be between $0 and $4 billion, compared with $3.7 billion in the first quarter of 2022. This guidance assumes, among other things, that no additional business acquisitions, restructurings or legal settlements are concluded.